Supply shortfall results in sudden onion price-hike

The country produced 4.4 million tonnes of onion in the 2024-25 growing season, exceeding the estimated demand of 3.5 million tonnes. However, there is now a shortage of onions, and the price has increased.

The prices of locally produced onions have surged recently at both farm and retail levels. Farmers in the onion-growing region said that up to 30 per cent of the onions perished in storage after they were harvested. The remaining stocked onions have lost weight (because of moisture loss during storage). That is why there is a shortage now, even though 900,000 tonnes of surplus onions were produced.

Farmers who were interviewed in Pabna expressed satisfaction at the increased onion price. They argue that the recent high price has helped them recover the losses they incurred at the beginning of the onion harvest season, when the price was low. Traders suggested that onions must be profitable for farmers as well as affordable for consumers. The onion price is sometimes low, showing that the market is not controlled by any syndicate.

Shahidul Islam (55), a farmer from Dopmaj village in Santhia upazila, Pabna, said on 8 November, “Out of 150 maunds of onion I produced in the previous season, only 20 maunds remain. Half of the stock which I kept to sell later has spoiled. The price has increased, but I don’t have much left to sell. I hope to recover my costs and the cost of spoilage.” He sold onions at Tk 4,000 per maund on that day. The price had started increasing about 10 days before. Immediately after harvesting, he sold onions at Tk 1,200 per maund, which he says was lower than his production cost. “Many farmers like me made losses because of the earlier low price, and because of spoilage. Now we are recovering those losses. The present (high) market price will encourage many to grow onion in the coming season,” he added.

Hijbul Bahar Sumon (38), owner of Siam Traders, a trader who collects onions to supply to cities, said sales of onions from the farmers’ stocks has significantly fallen since late October. “I used to procure 4 or 5 tonnes of onion on each of two days of the weekly market, and now it is difficult to buy two tonnes. Most of the farmers are out of stock as many of the stocks perished. Only a handful of farmers still have stocks, and they are selling slowly.” he explained.

Abul Hashem (60), a farmer of Ulat in Sujanagar, another onion-growing hub, produced 1,500 maunds of onion on 28 bighas of land, but sold 1,100 maunds when the price was low, at between Tk 1,600 and Tk 2,000 per maund. About 320 maunds of his onions perished. He said, “I have only 80 maunds left to sell. Those who have stocks are selling slowly, which is why there is a shortage.”

Siddikur Rahman (55) is a wholesale trader and owner of Sheikh Traders in Kashinathpur, Sujanagar. He observed that onion stocks have fallen and those who had some stocks were selling slowly, hoping that the price will increase further. He said, “there is low supply. Only recently, we saw long queues of farmers trying to sell their onions at between Tk 2,200 and Tk 2400 per maund. All of a sudden, the price increased to around Tk 4000 a maund, and there are not enough onions.”

Dwelling on the issue, Additional Director of Agriculture Extension Department Dr Jamal Uddin said there is no shortage of onions in the country at present, though stocks are depleting fast. “Locally produced onions will meet the demand until December, when the early variety of onion will come to market. Imports from India may reduce market price in the short term, but will discourage farmers to cultivate onion next time,” he noted.

Experts have said that onions are produced and sold by thousands of farmers, and it is obvious that this market is not controlled by any cartel or syndicate. If it were controlled by a cartel, onions would not have been sold at a low price earlier in the season.

Rushad Faridi, assistant professor of economics at Dhaka University, said that the speculative behaviour of farmers is normal, and that “If farmers anticipate a price rise, it is very natural for them to hold products in inventory.”

Sm67bd@yahoo.com